Ephrata water rates likely to increase
EPHRATA - Ephrata residents are likely to see water rate increases starting in January to pay for $7 million in projects.
City staff proposed three different plans to raise the base rate people pay for water service in the city. Presently residential customers living in the city with a one-inch connection pay $26.10 plus 55 cents per 1,000 gallons of water used.
The first proposal would increase the base rate by $13 next year, making it $39 a month as the city finishes the projects by 2019, according to city records.
The second proposal increases rates by increments until 2017, when it would cap out at $40.45, according to city records. The projects would finish by 2022.
The final proposal is a combination of the two, featuring higher increments until 2017 when people would pay $44.50 a month, according to city records. The projects would finish by 2019.
The rate increases come after almost a decade of cutting spending, City Administrator Wes Crago said. A combination of falling revenues and a change in how the city does business led to a 34 percent drop in what the city spends.
The city's budget dropped from more than $15 million in 2002 to about $10 million in 2011, according to city records.
"At the same time, the rate of inflation has gone up more than 25 percent," Crago said. "We have cut, in real dollars, more than 34 percent ... We've also increased our services at the same time that we've decreased spending ... We've cut about as much as we can cut."
The last time the base rate was adjusted was in 2008, when it was increased by $8 prior to the city's water pipe replacement project, Crago said.
"(The 2008 increase) did not affect our operation and maintenance on the system, nor did it provide reserves to build out new construction for the system," he said. "Historically, at least going back to 1993 when I got involved with the city, we've never done our rates that way. We've always determined there was a need, almost an emergency, but we would not do it proactively to build up the reserves over time."
The rate increases were proposed after presentations by engineering firm Gray and Osborne, and city staff, about the water system plan. Most of the projects on the list didn't have any funding.
The projects involve three main issues - safety, comfort and economics, Crago said.
Starting with safety, he pointed out the water available for fighting fires in some parts of the city is lower than staff would like it.
"Any growth in the north and southeast areas could be difficult because (of the water available for fighting fires)," he said.
Crago raised concerns about health issues, saying the water system can be contaminated because of holes in old water pipes, he said.
"Our wellheads are not secured in a way that we would like them to be secured in that either malicious mischief could affect our wells or just contamination from an outside source - a spill, manure, anything could get into that area ... around the well and we'd have a very serious health threat," he said.
Moving to comfort, Crago said the water pressure levels in the north and southeast areas of the city is low, leaving some residents unable to run more than one tap at a time.
"Anyone directly connected to Well 10 will experience a sulfur smell when it's running full," he said. "The disruptions we've had to our water system are also a lack of comfort."
Economically, Crago pointed out preventative maintenance is less expensive than emergency repairs, he said. If the city doesn't start preventative maintenance, it will end up doing emergency repairs.
"If we were to land a major industrial developer right now, we might be limited in our ability to supply water and we would like to have excess capacity," he said.
The city cut the original $13 million list of plans to a $7.2 million list of projects staff felt were necessary. The projects include rehabilitating and testing Well 6, constructing Well 11, replacing two of the largest and oldest water pipes below Basin Street and increasing water pressure.
To pay for the projects, city staff proposed three possible plans. Two of the proposals would take eight years, the third would take 10 years, Crago said.
The first plan, called "Plan A," includes a single increase of $13 in 2012, he said. The city wouldn't need to use reserves for the plan, and would allow the city build the most critical items first.
"However, I believe a 50 percent rate change is unrealistic," Crago said. "If that would be supported by the community, it would certainly be the wisest fiscally."
The second plan, called "Plan B," uses the opposite philosophy, spreading the projects across 10 years, and having lower rate increases of $2.55 for most residential customers from 2012 to 2016 and a $1.60 increase in 2017, Crago said.
"We would use most, if not all of our reserves in the process," he said. "That gives you a fairly high rate at the end of the project, and it stretches out (when) the projects would be done."
Crago called the third plan, referred to as "Plan C," a compromise between Plan A and Plan B. The residential rate for a one-inch pipe would increase between 2012 to 2017. The increases vary from medium rate increases to smaller increases depending on the year.
When Councilmember Tony Mora asked if the staff had a recommendation, Crago responded the engineering firm liked Plan A.
"In an analogy, it's like tearing the Band-Aid off as quickly as possible," he said. "You take one hit, early on ... you'd get the most money up front, allowing us to do the projects as quickly as possible, and at the end of it, if you were to look at the bottom line of Plan A in 2019, when the projects are finished, your water rates, if there were no other changes, would still be $39 for the base rate."
Crago pointed out Plan B is the least favored since it would take 10 years to complete, and a lot of things could change.
Councilmember Kathleen Allstot said the $13 a month jump in Plan A was intimidating.
"I think people, who own homes or rent homes or who are going to have to pay this, will probably be able to swallow the smaller amount," she said.
Councilmember Bruce Reim supported getting the projects done sooner to take advantage of low prices for construction work, but he wanted to make sure people saw results quickly, he said.
"I hate (Plan) A, but I think it might be the best because we can really can put it to good use," he said. "That's a hard pill to swallow for people, but as long as people see something, that there is a plan, then I think we're in pretty good stead."
Crago said projects would take place almost every year, except for years when the city needed to save money for a larger project.
The councilmembers didn't agree on whether they wanted Plan A or C, but were opposed to Plan B.
The city will hold a second public hearing on the rates at 7 p.m. on Nov. 16 at Ephrata City Hall, located 121 Alder Street SW.
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